There's never a slow week on Wall Street, but things will be particularly busy in the next few days. Earnings season is heating up with hundreds of companies reporting quarterly results on some days. There are also some growth stocks ripe for making a move. Let's take a look at some of the names that could be moving higher this week.
I see Coca-Cola(NYSE: KO), Sleep Number (NASDAQ: SNBR), Imax(NYSE: IMAX), and Celsius Holdings(NASDAQ: CELH) as four stocks that could move higher this week. Three of them are posting critical financial updates. The other is ready to bounce back ahead of what should be another strong report next month. Let's see why these are tricks -- and not treats -- as we head into the final trading days of the month.
1. Coca-Cola
You might not view Coca-Cola as a growth stock, but after back-to-back years of double-digit percentage growth you may want to crack open a can of the sparkling pop star. Coca-Cola reports its third-quarter results before the market opens on Tuesday. Even if you let the numbers sit for a bit, they're not likely to go flat.
Coca-Cola's revenue growth has slowed to 5% through the first half of this year, but it did boost its forecast for organic revenue growth in its previous financial update this summer. Coca-Cola now sees a top-line increase of 8% to 9% for all of 2023, so things should pick up in the second half of the year.
Image source: Getty Images.
Analysts aren't holding out for much in Tuesday morning's report. They see flat earnings growth on a 9% year-over-year gain on the top line. Watch this space. Coca-Cola is coming off of back-to-back quarters of accelerating bottom-line beats, and a nervous market could be just the tonic for Coca-Cola shares.
The stock moved higher in 2022, when many traditional growth stocks shifted into reverse. The stock is down 12% this year, but if you smell a flight to quality coming you'll appreciate Coca-Cola. It has a chunky 3.4% yield with a 61-year streak of payout hikes. It also has a largely recession-resistant product. All it needs is a caffeinated report this week to wake up the sleepy stock.
2. Sleep Number
If you want a truly out-of-favor earnings play, pull up a chart on Sleep Number. The company behind the next-gen air-chambered mattresses has seen its stock cut nearly in half since peaking this summer. The company behind the high-tech beds with adjustable firmness settings and features to improve sleep quality has hit hard times, just as we've seen with many companies providing big-ticket purchases for the home.
Its latest report was problematic. Revenue declined the way it has in five of the last seven quarters. Investors are bracing for more of the same, targeting a 3% decline for the third-quarter results it will discuss in a few days. Sleep Number doesn't seem like a growth company, but it was also one that rattled off 12 fiscal years of positive growth before a supply chain shortage on chips followed by an economy-related slump in demand. It will eventually recover given the appeal of its differentiated sleep-enhancing bedding. In the meantime it trades for just 11 times next year's projected earnings.
3. Imax
You may have missed it in the flurry of meme stocks and the streaming video revolution, but folks have been flocking back to the local multiplex lately. It's not just Taylor Swift: The Eras Tour becoming the first concert film to top $100 million in ticket sales earlier this month or even this summer's runaway success of Barbie and Oppenheimer, three films that like most blockbusters make sure they are available in the super-sized and enhanced Imax format to maximize their box office success.
Imax is rolling. After an understandably depressed showing in 2020 revenue, it's well on its way to delivering its third consecutive year of double-digit revenue growth. The top-line growth is actually accelerating this year. Analysts see 44% in revenue growth on an explosive turnaround in profitability when it reports on its seasonally potent summertime quarter on Wednesday morning. After a strong summer and an encouraging start to the current quarter thanks to premium-paying Swifties, it's not just the Imax screens that are huge right now.
4. Celsius
Let's close with a second beverage stock that packs a lot more growth fizz than Coca-Cola. Celsius Beverage makes a popular line of fruit-flavored energy drinks that helps speed up a body's metabolism. This will be the fourth year in a row that finds revenue growing by at least 74%. Sales have already moved 104% higher through the first six months of this year.
Celsius is the only company on this list that isn't reporting quarterly results this month. It typically delivers its third-quarter metrics in November. However, Wall Street's eyeing its third straight quarter of positive earnings with revenue growth accelerating to 115%. With a history of "beat and raise" performances and the potential to finally grow internationally, it's a name ready to bounce back after correcting 22% from its recent all-time highs.
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Rick Munarriz has positions in Celsius and Sleep Number. The Motley Fool has positions in and recommends Celsius. The Motley Fool recommends Sleep Number and recommends the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy.
